Breaking Down RE/MAX Holdings, Inc. (RMAX) Financial Health: Key Insights for Investors

Are you keeping a close watch on RE/MAX Holdings, Inc.'s (RMAX) financial performance? Did you know that in 2024, the company reported a total revenue of $307.7 million? While this reflects a 5.5% decrease compared to the previous year, the adjusted EBITDA actually increased by 1.5% to $97.7 million, showcasing the company's efficiency in managing its operations. But with the agent count in the U.S. and Canada declining by 4.8% to 76,457, and the number of Motto Mortgage franchises dropping by 8.5%, how will these trends impact future profitability? Let's delve deeper into the key financial insights that can help you make informed investment decisions.

RE/MAX Holdings, Inc. (RMAX) Revenue Analysis

RE/MAX Holdings, Inc. (RMAX) generates revenue primarily through:

• Franchise fees: These include initial franchise fees and continuing franchise fees, which are recurring payments from franchisees.
• Broker open fees: Fees collected from brokers for various services and support.
• Technology and other services: Revenue from technology solutions, marketing services, and other offerings provided to franchisees and agents.

Analyzing RE/MAX Holdings, Inc.'s revenue streams involves looking at the performance of its key segments. For instance, the company reports revenue from its Real Estate segment, which includes franchise and broker fees, and the Mortgage segment, which includes revenue from mortgage-related activities.

To understand the revenue dynamics, it's essential to monitor the year-over-year revenue growth rate. This metric indicates the percentage increase or decrease in revenue compared to the previous year, reflecting the company's growth trajectory and market conditions.

Here's how revenue streams contribute to RE/MAX Holdings, Inc.'s overall revenue:

• Real Estate Franchise Fees: A substantial portion of revenue comes from fees paid by franchisees.
• Ancillary Services: Technology and marketing services contribute to the revenue mix, providing additional income streams.

Changes in revenue streams can occur due to various factors, such as:

• Market conditions: Fluctuations in the real estate market can impact franchise sales and agent activity, affecting revenue.
• Strategic initiatives: New technology offerings or marketing programs can drive additional revenue from existing and new franchisees.
• Acquisitions and divestitures: Strategic moves to acquire or sell business units can alter the revenue composition.

For a deeper dive into RE/MAX Holdings, Inc.'s financial health, you can explore this comprehensive analysis: Breaking Down RE/MAX Holdings, Inc. (RMAX) Financial Health: Key Insights for Investors

RE/MAX Holdings, Inc. (RMAX) Profitability Metrics

Analyzing the profitability of RE/MAX Holdings, Inc. (RMAX) involves looking at several key metrics that provide insights into the company's financial health. These include gross profit margin, operating profit margin, and net profit margin. Also, for additional context, consider exploring the Mission Statement, Vision, & Core Values of RE/MAX Holdings, Inc. (RMAX).

For the full year 2024, RE/MAX Holdings reported:

• Total Revenue decreased by 5.5% to $307.7 million compared to 2023.
• Revenue excluding Marketing Funds decreased by 5.4% to $228.7 million. This decrease was driven by negative organic growth of 5.2% and adverse foreign currency movements of 0.2%.
• Net income attributable to RE/MAX Holdings, Inc. was $7.1 million, with earnings per diluted share (GAAP EPS) of $0.37.
• Adjusted EBITDA increased by 1.5% to $97.7 million, resulting in an Adjusted EBITDA margin of 31.8% and Adjusted earnings per diluted share of $1.30.

RE/MAX Holdings' gross profit margin for the latest twelve months is 74.3%. The gross profit margin for fiscal years ending December 2020 to 2024 averaged 74.8%.

The historical gross profit margins show:

• Peak in December 2020: 75.8%
• 5-year low in December 2023: 74.2%

Changes in gross profit margin from 2020 to 2024:

• 2020: 75.8% (increased by 1.9%)
• 2021: 75.0% (decreased by 1.0%)
• 2022: 74.4% (decreased by 0.8%)
• 2023: 74.2% (decreased by 0.3%)
• 2024: 74.3% (increased by 0.1%)

RE/MAX Holdings, Inc. (RMAX) had an Operating Margin of 5.89% for the fiscal quarter ending 2024-12-31 [1]. The operating margin as of April 2025 (TTM) is 13.79%. At the end of 2024, the company had an Operating Margin of 2.02%.

Operating Margin history for RE/MAX Holdings from 2013 to 2024:

For the fourth quarter of 2024:

• Net income attributable to RE/MAX Holdings was $5.8 million, compared to a net loss of ($10.9) million for the fourth quarter of 2023.
• Reported basic and diluted GAAP earnings per share were $0.31 and $0.29, respectively, for the fourth quarter of 2024.
• Adjusted EBITDA was $23.3 million for the fourth quarter of 2024, an increase of $0.4 million, or 1.6%, compared to the fourth quarter of 2023.
• Adjusted EBITDA margin was 32.2% in the fourth quarter of 2024, compared to 30.0% in the fourth quarter of 2023.

Effective cost management led to solid first-quarter margin performance. This focus, coupled with a growth mindset and a focus on delivering the absolute best customer experience, are cornerstones supported by RE/MAX agents.

RE/MAX Holdings, Inc. (RMAX) Debt vs. Equity Structure

Understanding how RE/MAX Holdings, Inc. (RMAX) manages its debt and equity is crucial for investors. This involves looking at the company's debt levels, ratios, and financing activities to assess its financial strategy and stability. You might also be interested in Exploring RE/MAX Holdings, Inc. (RMAX) Investor Profile: Who’s Buying and Why?.

Here’s a breakdown:

Overview of Debt Levels:

• As of December 31, 2024, RE/MAX Holdings, Inc. (RMAX) had $440.8 million of outstanding debt, net of unamortized debt discount and issuance costs. This is a slight decrease compared to $444.6 million as of December 31, 2023.
• The company's short-term debt and capital lease obligations totaled $13.2 million as of December 2024.
• Long-term debt and capital lease obligations amounted to $458.9 million at the end of December 2024.
• The current portion of long-term debt for RE/MAX Holdings, Inc. (RMAX) was $4.6 million as of December 31, 2024, remaining unchanged from the previous year.

Debt-to-Equity Ratio:

• For the fiscal year ending December 2024, RE/MAX Holdings, Inc. (RMAX) had a debt-to-equity ratio of 1.10. This is calculated using the formula: Total Debt / Total Stockholders Equity = (Short-Term Debt & Capital Lease Obligation + Long-Term Debt & Capital Lease Obligation) / Total Stockholders Equity = ($13.156 million + $458.912 million) / $429.483 million = 1.10.
• Another source indicates a debt-to-equity ratio of 1.026 as of December 31, 2024.

Debt-to-Asset Ratio:

• The debt-to-asset ratio for RE/MAX Holdings, Inc. (RMAX) as of December 2024 was 0.81. This is derived from total liabilities of $639.988 million and total assets of $581.6 million.

Recent Debt and Financing Activities:

• In January 2022, the Board of Directors authorized a common stock repurchase program of up to $100 million. As of December 31, 2024, $62.5 million remained available under this program, though no shares were repurchased during the last three months of 2024.

Balancing Debt and Equity:

RE/MAX Holdings, Inc. (RMAX) strategically manages its debt and equity to fund growth and operations. The company's outstanding debt was $440.8 million as of December 31, 2024. To service this debt, the company may need to refinance, dispose of assets, or issue additional equity if cash flow from operations is insufficient. The company's level of indebtedness could impact its ability to respond to market conditions, make capital investments, or take advantage of business opportunities.

The following table summarizes key debt-related data for RE/MAX Holdings, Inc. (RMAX):

RE/MAX Holdings, Inc. (RMAX) Liquidity and Solvency

Liquidity and solvency are crucial indicators of a company's financial health, revealing its ability to meet short-term obligations and sustain long-term operations. For RE/MAX Holdings, Inc. (RMAX), analyzing these metrics provides insights into its financial stability and risk profile.

Assessing RE/MAX Holdings, Inc.'s Liquidity:

Liquidity ratios measure a company's ability to cover its short-term liabilities with its short-term assets. Key ratios include the current ratio and the quick ratio.

• Current Ratio: This ratio is calculated by dividing current assets by current liabilities. As of December 31, 2024, RE/MAX Holdings, Inc.'s current ratio was approximately 1.45, calculated from current assets of $211.4 million and current liabilities of $145.9 million. A ratio above 1 indicates that the company has more current assets than current liabilities, suggesting a good ability to meet its short-term obligations.
• Quick Ratio: This ratio excludes inventories from current assets to provide a more conservative measure of liquidity. RE/MAX Holdings, Inc.'s quick ratio for the year ended December 31, 2024, was approximately 1.44, based on quick assets of $210.1 million and current liabilities of $145.9 million. This indicates that the company can comfortably cover its current liabilities with its most liquid assets.

Analysis of Working Capital Trends:

Working capital, calculated as current assets minus current liabilities, is a measure of a company's short-term financial health. As of December 31, 2024, RE/MAX Holdings, Inc.'s working capital was $65.5 million. Monitoring the trend of working capital helps assess whether the company is efficiently managing its short-term assets and liabilities.

Cash Flow Statements Overview:

Cash flow statements provide a comprehensive view of all cash inflows and outflows, categorized into operating, investing, and financing activities. Analyzing these trends is crucial for understanding RE/MAX Holdings, Inc.'s liquidity position.

• Operating Cash Flow: For the year 2024, RE/MAX Holdings, Inc. reported net cash provided by operating activities of $78.2 million. This indicates the company's ability to generate cash from its core business operations.
• Investing Cash Flow: In 2024, RE/MAX Holdings, Inc. had net cash used in investing activities of $12.7 million. This primarily includes investments in property and equipment, as well as strategic acquisitions.
• Financing Cash Flow: For the year 2024, RE/MAX Holdings, Inc. reported net cash used in financing activities of $36.1 million. This includes activities related to debt repayment, share repurchases, and dividend payments.

Potential Liquidity Concerns or Strengths:

Based on the 2024 financial data, RE/MAX Holdings, Inc. demonstrates several liquidity strengths:

• Strong Current and Quick Ratios: Both ratios indicate a solid ability to meet short-term obligations.
• Positive Operating Cash Flow: The company generates substantial cash from its operations, providing a buffer for managing liabilities and investing in growth opportunities.

However, potential concerns may include:

• Use of Cash in Financing Activities: While strategic, significant cash outflows for debt repayment and share repurchases could impact liquidity if not managed carefully.
• Investing Activities: Continued investments require careful monitoring to ensure they generate adequate returns and do not strain cash reserves.

Here is a summary of key liquidity metrics for RE/MAX Holdings, Inc. as of December 31, 2024:

For further insights into RE/MAX Holdings, Inc.'s investor profile, you can explore: Exploring RE/MAX Holdings, Inc. (RMAX) Investor Profile: Who’s Buying and Why?

RE/MAX Holdings, Inc. (RMAX) Valuation Analysis

Determining whether RE/MAX Holdings, Inc. (RMAX) is overvalued or undervalued requires analyzing several key financial ratios and indicators. These include price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, along with stock price trends, dividend yield, payout ratios, and analyst consensus.

Here’s a breakdown:

Valuation Ratios

• Price-to-Earnings (P/E) Ratio:
• The trailing P/E ratio is around 19.70.
• The forward P/E ratio is approximately 5.83.
• However, another source indicates a current P/E ratio of -121 as of April 2025, suggesting the company is generating heavy losses compared to its current valuation.
• Price-to-Book (P/B) Ratio: The P/B ratio is around 0.32.
• EV/EBITDA Ratio:
• The EV/EBITDA ratio is reported as 7.87.
• However, another source states that the latest twelve months EV/EBITDA is 0.7x.
• Historically, RE/MAX's EV/EBITDA ratio peaked in December 2021 at 6.8x and hit a 5-year low in December 2024 at 0.7x.

Stock Price Trends

• The stock price has increased by approximately +2.68% in the last 52 weeks.
• Recent data from April 2025 shows the stock price around $7.29.
• The 52-week high is $14.31, while the 52-week low is $6.90.

Dividend Yield and Payout Ratios

• RE/MAX Holdings Inc. (RMAX) used to pay dividends quarterly.
• The last paid amount was $0.230 at Aug 29, 2023.
• As of today, dividend yield (TTM) is 0%.
• The company suspended dividends to generate $50 million in free cash flow for 2025.

Analyst Consensus

• The analyst rating consensus is a 'Moderate Sell'.
• Based on ratings from 3 Wall Street analysts.
• The average price target is $7.50, representing a potential 2.88% increase from the current price of $7.29.

Additional Valuation Metrics

Here's a table summarizing key valuation metrics for RE/MAX Holdings, Inc. (RMAX):

For further insights, consider reading Breaking Down RE/MAX Holdings, Inc. (RMAX) Financial Health: Key Insights for Investors.

RE/MAX Holdings, Inc. (RMAX) Risk Factors

RE/MAX Holdings, Inc. (RMAX) faces a variety of internal and external risks that could significantly impact its financial health. These risks span across industry competition, regulatory changes, and overall market conditions. Understanding these factors is crucial for investors assessing the company's stability and future prospects. Further insights into the company's strategic direction can be found at Mission Statement, Vision, & Core Values of RE/MAX Holdings, Inc. (RMAX).

Several key risks can affect RE/MAX Holdings, Inc. (RMAX):

• Industry Competition: The real estate industry is highly competitive. RE/MAX faces competition from other large franchisors, independent brokerages, and technological disruptors that offer alternative business models. Increased competition could lead to decreased market share and reduced revenue.
• Regulatory Changes: Changes in real estate regulations, both at the federal and local levels, can impact the way RE/MAX and its franchisees operate. For example, changes in commission structures, licensing requirements, or fair housing laws could increase compliance costs or limit revenue potential.
• Market Conditions: The performance of RE/MAX is closely tied to the overall health of the housing market. Economic downturns, rising interest rates, or declines in home sales can significantly reduce transaction volume and franchise revenue.
• Operational Risks: These include challenges related to managing a large franchise network, maintaining brand reputation, and adapting to changing consumer preferences. Failure to effectively manage these operational aspects can negatively impact the company's financial performance.
• Financial Risks: RE/MAX's financial health is susceptible to risks associated with debt levels, interest rate fluctuations, and the ability to generate sufficient cash flow to meet its obligations. Prudent financial management is essential to mitigate these risks.
• Strategic Risks: Strategic risks involve decisions related to business strategy, innovation, and market expansion. Poor strategic choices, such as failing to adapt to technological advancements or entering new markets unsuccessfully, can harm the company’s competitive position and financial results.

Mitigation strategies are crucial for addressing these risks. While specific plans may vary, common strategies include:

• Diversification: Expanding into new markets or service offerings to reduce reliance on traditional real estate transactions.
• Technological Innovation: Investing in technology to enhance agent productivity, improve customer experience, and stay ahead of competitors.
• Compliance Programs: Implementing robust compliance programs to address regulatory changes and ensure ethical business practices.
• Financial Planning: Maintaining a strong balance sheet, managing debt levels, and optimizing cash flow to weather economic downturns.
• Franchisee Support: Providing comprehensive training, marketing support, and technology tools to help franchisees succeed in their local markets.

Recent earnings reports and filings provide further details on these risks and the company's strategies to manage them. Investors should carefully review these documents to gain a comprehensive understanding of the challenges and opportunities facing RE/MAX Holdings, Inc. (RMAX).

RE/MAX Holdings, Inc. (RMAX) Growth Opportunities

RE/MAX Holdings, Inc. (RMAX) faces a dynamic real estate landscape, requiring a multifaceted approach to future growth. Key drivers include strategic market expansions, innovative technological solutions, and leveraging its established brand presence.

Analysis of key growth drivers:

• Product Innovations: Investing in technology to enhance agent productivity and customer experience. This includes AI-driven tools for lead generation, virtual property tours, and streamlined transaction processes.
• Market Expansions: Focusing on expanding its footprint in high-growth markets, both domestically and internationally. This involves strategic acquisitions of smaller brokerages and attracting top-performing agents.
• Acquisitions: Pursuing strategic acquisitions to increase market share and expand service offerings. This could include acquiring complementary businesses such as mortgage companies or property management firms.

Future revenue growth projections and earnings estimates will depend on RE/MAX Holdings, Inc.'s (RMAX) ability to capitalize on these growth drivers. While specific projections vary, analysts generally anticipate moderate revenue growth driven by increased transaction volume and agent count. Earnings estimates will be influenced by factors such as commission rates, operating expenses, and interest rates.

Strategic initiatives and partnerships that may drive future growth:

• Technology Partnerships: Collaborating with technology companies to integrate innovative solutions into its platform. This could include partnerships with companies specializing in AI, blockchain, or virtual reality.
• Expansion of Ancillary Services: Diversifying revenue streams by expanding ancillary services such as mortgage origination, title insurance, and property management.
• Global Expansion: Continuing to expand its international presence, particularly in emerging markets with high growth potential.

RE/MAX Holdings, Inc.'s (RMAX) competitive advantages that position the company for growth:

• Brand Recognition: Strong brand recognition and reputation, which attracts both agents and customers.
• Global Network: Extensive global network of agents, providing a competitive advantage in international markets.
• Franchise Model: Scalable franchise model, which allows for rapid expansion with limited capital investment.

To further understand the company's direction, review the Mission Statement, Vision, & Core Values of RE/MAX Holdings, Inc. (RMAX).

A summary of key financial data from the RE/MAX Holdings, Inc. (RMAX) 2024 fiscal year:

These figures are approximate and based on available data and projections for the 2024 fiscal year. Actual results may vary.

Strategic initiatives such as technology adoption, market diversification, and ancillary services expansion are expected to play a crucial role in sustaining and enhancing RE/MAX Holdings, Inc.'s (RMAX) market position. The company's ability to leverage its brand strength and adapt to changing market dynamics will be critical for future success.